Yes it is bad, but with the ban in place, this is very hard to avoid. People always like to think they are doing the right thing, and are following the Dalai Lama 100%. The Dalai Lama, never told them to do this so we can whine about it, yet we can also see the positives.
Without the ban images such as these wouldn't have existed. Now even more people, especially people against Shugden can be blessed by him, and it can plant imprints in their mind. Even though it is not in the manner we like to see our King, at least in some twisted way his image is out there. Now people who see he is being stepped on will learn about him. They will learn why he is bad, and hopefully someway along the way they will learn the truth, and realize he is a fully enlightened protector. In the best case scenario they will start to practice. In the worst case scenario imprints will be planted in their midstream so they can meet him in a future life. Win, win.